eBay ‘avoids £50million in UK corporation tax’

Online auction site eBay has been accused of avoiding almost £50million in corporation tax in the UK by legally channelling payments through subsidiaries in Luxembourg and Switzerland.

eBay has insisted it fully complies with all tax regulations (Picture: AP)

The claims against eBay, made by the Sunday Times, follow similar accusations against legal tax avoidance at Amazon, Starbucks and Facebook.

According to the Sunday Times, US-based eBay Inc, the parent company of eBay (UK), said its four British subsidiaries earned £789million in sales in 2010.

Against a group-wide profit margin of 23 per cent in 2010, the most recent year for which accounts are available, that would give UK profits of £181million.

Despite an expected tax bill of £51million, the annual tax paid in that year was £1.2million.

The Sunday Times said fees paid by sellers in the UK were processed by PayPal in Luxembourg, while eBay (UK) is designated as providing ‘services’ to its Swiss sister company, eBay International AG.

‘eBay Inc in Europe works with tax authorities and complies fully with all applicable tax laws and regimes — including national and internationally recognised rules,’ eBay said in a statement.

Last week coffee giant Starbucks was criticised for only paying £8.5million in UK corporation tax in the last decade, and nothing since 2009.

It was also claimed Facebook paid £238,000 in tax on revenues of £20.4million through headquartering itself in Ireland, while Amazon also came under fire for reportedly not paying any corporation tax on sales of £7.6billion in the past three years.